Can decentralization of renewable energy accelerate decarbonization efforts? The Middle East sourced more than 350 MW of energy from off-grid renewables sources such as decentralized solar installations in 2021, according to the 2022 International Energy Agency (IEA) off-grid statistics report (pdf). Some 775 mn people globally won’t have access to electricity in 2022 due to the global energy crunch, extreme weather, and poor infrastructure. More than half of these people can gain access to full-fledged electrification mainly through renewables-based decentralized energy solutions by 2030, according to another IEA report.

What are decentralized energy systems? Several energy sources can be utilized in off-grid and standalone energy systems including wind power and solar energy. Decentralized energy systems see power generated in close proximity to where it’s consumed, instead of relying on centralized national grids. The nature of the offgrid approach effectively minimizes transmission losses and distribution costs over long distances, and maximizes the use of renewable energy, according to research by the United Nations.

Africa is a success story: 52.6 mn Africans — who otherwise would have been living without electricity — are now able to source their own power needs due to off-grid energy solutions, according to a recent IEA report.

Easy deployment and tremendous benefits for decentralized solar: The smaller magnitude of resources needed for the utilization of solar panels in residential areas and for businesses, compared to utility scale projects, renders off-grid solutions a cost-efficient option to bolster decarbonization. Although decentralized systems require upfront investments in storage systems and components like solar panels, it enables users to become self-sufficient, and enables the sale of excess power back to the grid and other stakeholders, which would ultimately mean cheaper electricity bills in the long term, according to Friedrich Ebert Stiftung. Becoming self-sufficient also translates to effective immunization against energy market volatility, according to research published in Science Direct. From a real estate perspective decentralized systems also hike the prices of buildings.

MENA is gearing up for the decentralization game: Individuals and businesses in Morocco will be allowed to generate, store, and sell their own electricity from renewables after Morocco’s House of Representatives unanimously approved a new bill on electricity self-production. While the bill aims to regulate electricity production for self-consumption, it also touches upon the possibility of selling excess electricity to the grid. The legislation — which was approved by the Moroccan Senate in November 2021 — became law last month.

Ditto for Egypt: The Egyptian government launched in 2018 the Egypt PV project to bolster decentralization efforts for businesses and individuals looking to implement off-grid energy systems. The program offers cash incentives for individual households looking to adopt standalone systems up to USD 200 per KW for decentralized installations, but sets a cap of 10 KW for this type of financial support for residential installations. Incentives up to USD 200 per KW are provided to larger residential complexes comprising multiple households, with a cap of 50 MW. For industrial players, the government is offering incentives amounting to USD 150 per KW with a generational cap of 100 KW.

Bahrain’s government is also pushing for off-grid energy: The country is eyeing the generation of 100-150 MW of power from decentralized models including rooftop solar photovoltaic (PV), biogas plants, and micro wind turbines, as part of its National renewable Energy Action Plan. The Bank of Bahrain and Kuwait also provides sustainability financing for retail customers looking to adopt energy-saving technology and renewable energy sources in their houses, we wrote in October.

Meanwhile, in Tunisia: The African Development Bank (AFDB) approved in February a finance agreement that would see Tunisia and six other African nations receive USD 164 mn to promote decentralized renewable energy systems, an AFDB statement notes. The projects AFDB will finance would ultimately reduce some 28.8 mn tons of greenhouse gas emissions. More recently, Germany approved a EUR 105 mn grant to bolster, among other things, Tunisia’s decentralization efforts.

Decentralization could be the remedy for pollution and energy woes: In Lebanon, Iraq, Yemen, and Libya, systemic central power network failures have left residents reliant on generators that pump over 40 toxic contaminants into the air. Diesel-powered generators spew out especially large quantities of climate change-inducing emissions — and more than 40 toxic by-products. To combat pollution and bolster decentralization of renewables, donors funded a USD 100k 185-panel solar farm in the village of Toula. The village, which used to run on only three hours of electricity a day, now has 17 hours of consistent electricity.

And saves lives in crisis-hit countries: The Yemen Emergency Electricity Access Project, spearheaded by the World Bank, was approved in 2018 to stave off energy poverty through decentralized solar installations. The project benefits some 91k households in rural regions, and services 517 critical facilities including schools and health centers, according to a World Bank statement.